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Start-ups Generate Fewer New Jobs

Ingrid Baker — Thu, 22 Sep 2011 16:12:42 +0000

Many of the news stories on job losses/job creation/unemployment state that small businesses, led by start-ups, generate over 50% of new jobs in the economy. An article in the Wall Street Journal (9/15/2011) quotes the Small Business Administration as saying that 65% of new jobs over the last 17 years were due to small employers.
That same article “With New Technology, Start-ups Go Lean”, says that the number of workers needed to launch a new company has decreased by almost half in the past decade. Start-ups are being launched with an average of 4.9 employees vs. the 7.5 workers in the 1990s. At the same time, the number of start-ups has held steady, or even showed a slight increase since the recession, according to a study by the Kauffman Foundation. This factor can have a huge impact on overall job recovery.
Efficiency is a good thing, but how do they do it? As it turns out, using Web-based business tools, and working with contract developers/workers online has reduced the need for bodies in the company. The availability of web-based collaborative tools allows disparate groups to work together on projects, and eliminates the need for a large staff.
One thing occurs to me – maybe the start-up or small business doesn’t add to its staff, but the work (managing the projects, ordering supplies, keeping financial records, etc) still needs to be done. Someone outside the company is getting paid for providing these services in another setting. Whereas the work may be done more efficiently, we still have a job opportunity for some bright soul. It might be interesting to compare costs for outside services and support between today’s start-up and the earlier versions.
Sadly there’s one part of this story that doesn’t help our jobs picture – the ease of collaboration with overseas talent. Good for keeping costs down, but not so good for the job market either.
In the meantime, the really good news is that start-ups are continuing to launch at a steady rate, and our innovative talent is still at work. Keep up the good work!

Green Jobs Highlighted for New Mexico

Ingrid Baker — Fri, 02 Sep 2011 20:54:35 +0000

The New Mexico Department of Workforce Solutions (NMDWS) received an individual State Labor Market Information Improvement Grant, in the amount of $1,250,000, to gather information on employers and opportunities in New Mexico in four key sectors:
* Renewable Energy;
* Green Clean Manufacturing;
* Energy Efficiency; and
* Research, Development, and Administration.

Research is being conducted by the Arrowhead Center at New Mexico State University. ER&A will conduct an educational inventory with the assistance of the New Mexico Public Education and Higher Education Departments. Ultimately, survey results and data will be provided to job seekers, educational institutions, business communities, and state agencies to help guide the State Energy Sector Partnership and Training grant efforts. (see below)
Another goal of the grant is development of the Mobile Green Jobs Workforce Center (MGJWC), whereby job seekers will have access to new computer workstations, software, and online services resulting from the Grant research utilizing this new resource. The MGJWC will be more responsive to the targeted population needs by making resources available to job seekers in all areas and communities with the most need, such as the state’s rural population, isolated Native American tribal areas, and other underserved communities. The MGJWC can also serve as a training center to promote workforce information and other topics at mass layoff rapid response locations around the state. All the data collected and outlined under this Grant will provide essential information to help stimulate the growth of New Mexico’s new green economy and help fill the job market void left by recent business contractions and closures.

State Energy Sector Partnership Program
The goal is to establish a statewide approach to job seeker training in renewable energy/energy efficiency occupations in solar, wind, green building/energy efficiency and biofuels. These are identified as sectors active in the State with a potential for job opportunities in the future. The oversight council, a subcommitte of the State Workforce Board will work to identify industry needs and job opportunities to make sure that training matches with the sector needs.
To be eligible for training candidates must be over 18 and 1) have a Social Security number, 2) have the right to work in the U.S., and 3) comply with Selective Service registration requirements (for males)
AND
Be included in one or more of the following groups:
1. An incumbent (currently employed) worker in need of skills upgrades for a solar, wind, biofuels, green building/energy efficiency green job;
2. A displaced (currently unemployed) worker ;
3. A woman;
4. A veteran or qualified spouses of a veteran;
5. A high school dropout; and/or
6. meet low-income eligibility guidelines.
To apply for this program complete the SESP training pre-application, available at the project website, www.greenjobs.state.nm.us, and take it to your local Workforce Connection Center. Your nearest Workforce Connection Center can be found by visiting http://www.dws.state.nm.us/dws-offices.html.

New Labor Guidelines Concerning “Facebook Firings”

Ingrid Baker — Thu, 04 Aug 2011 14:41:38 +0000

The National Labor Relations Board is entering new territory as workers across the country file complaints because they were fired over Facebook indiscretions. Although the Board has taken up the cases of a number of workers, others have been told they have no one to blame but themselves.
There are few guidelines in place. General Counsel for the NLRB is currently drafting a report outlining certain Facebook scenarios and how the board has acted on the complaints.
According to an article in the online Huffington Post August 2, the NLRB has been inundated with worker complaints, and has been handling them on a case-by-case basis. Employers, meantime, need some idea of what the guidelines will be for dealing with this issue.
Two cases in point: a Walmart worker who referred to his manager using a rude Spanish term for a female on the social networking site after they fought over store displays, and a frustrated Illinois bartender who took to Facebook to complain that he hoped the “redneck” patrons choked on glass as they drove home drunk.
The latter worker was canned, and the former admonished for their respective outbursts. When they appealed to the National Labor Relations Board, the board declined to intervene, saying the punishments were legitimate.
In another case where an employee criticized her boss on Facebook (categorizing him as a psychiatric case), the firing was based on a company policy forbidding employees to criticize the company online. The NLRB held that this policy was too broad and took up the employee’s complaint. The argument was that the posting was no different than gossiping around the water cooler – what we used to do in the old days!
A spokesperson for the NLRB had some advice for employers. “You can’t stick your head in the sand and tell your workers to abstain”. We know that won’t happen, so work with your leadership to come up with some reasonable guidelines. The NLRB should be releasing its report on Facebook cases in the next few weeks, so stay tuned. Such an interesting world!

The New Entrepreneur (read Social)

Ingrid Baker — Fri, 22 Jul 2011 20:45:50 +0000

If you google “the new entrepreneur” you’ll get pages of references to entrepreneurs with a twist – a mission to give back to society through new business ideas. These new companies with a social mission have a wide range of solutions, and are successful in the process. This may be your next great business idea.
For example and article in Bloomberg Businessweek highlighted winners of a contest: “America’s Most Promising Social Entrepreneurs”. Profiles of 25 finalists were posted on the Businessweek website in June.
Businessweek.com readers voted for their choice, and the winner was a San Francisco print shop that hires recovering addicts and ex-offenders . The company, Social Imprints, garnered 15.7 percent of the nearly 3,000 votes cast by readers. Co-founded by Jeff Sheinbein and Kevin McCracken, who overcame heroin and alcohol addiction himself, the 3-year-old company employs seven people and had $2 million in revenue last year.
Dalberg, a New York-based consultant focused on international social and environmental problems, was second. Founded by veterans of McKinsey in 2001, Dalberg has sales above $15 million and 120 employees in 10 global offices.
Other companies included Intuary, the maker of an iPad app that helps people who can’t speak communicate. The 5-employee startup is launched the app, called Verbally, in March and is projecting sales of $200,000 this year.
Nest Collective,which sells healthy children’s food under the Plum Organics baby food brand and Revolution Foods lunchbox snacks was another winner. The 26-employee company, founded in 2007, had $15 million in revenue last year.
The list also included StayClassy, an online fundraising platform for small nonprofits. The 6-year-old company had $250,000 in revenue last year and has helped 2,000 nonprofits raise more than $5 million.
There are more winners listed on the Bloomberg site, but those listed above show the wide variety of ideas, and the money to be made, in helping improve all aspects of our society. What is your great idea?

Small Business and Startups Feel the Pinch, Slowing Job Growth

Ingrid Baker — Mon, 13 Jun 2011 19:27:15 +0000

As most economic writers will tell you, it is the small business sector in our country that adds the most jobs to our economy. As a matter of fact large businesses (over 500 employees) have reduced the number of employees significantly in the last few years. Thus job seekers are feeling the pinch as new business startup statistics are the lowest since the 1990s.
An article in USA Today Small Business provided a summary from the Bureau of Labor Statistics. For the 12 months ending in March 2010 there were 505,000 new business startups – the weakest growth since the bureau started tracking this stat in the 1990s. Other publications have tracked current trends and say the outlook is not very rosy (National Federation of Independent Business). After steady increases through early February, the optimism index dipped for March and April of this year.
The lack of new business is attributed by many to the lack of consumer spending. Sales trends are down, and there is a lot of uncertainty about what is next. Also companies are worried about what will happen in the next year in U.S. Government.
This news impacts our unemployment issues. National unemployment statistics hover at 9%, and an article in the Financial Times said that the “basic unemployment” percent (people between jobs or permanently unemployed) may not ever get back down to the 3% level we’ve held for years. For every “opportunity” for growth in an industry there is a balancing economic factor that may dampen that growth. One example was the optimistic view that companies might move manufacturing jobs back to the U.S. because of rising costs overseas. The pessimistic view is that these same companies will adopt more technologies that would replace these very jobs!
There is an interesting factor in all this news. Technology companies (mostly small businesses) and technology jobs continue to make gains, and there are jobs going begging. The reason – the workforce lacks the skills to fill these positions. One article talked about the loss of jobs in the construction sector, and the need for trained workers in the healthcare industry…and these skills don’t cross over. There are also jobs to be had in IT, and even in skilled manufacturing.
There is no easy answer to the problem. There is hope for the job seeker with technology or IT skills, but it will require time and patience to find the best match. Keep hunting!

Verifying Education Credentials Not the Last Step

Ingrid Baker — Thu, 02 Jun 2011 20:34:27 +0000

Employers know that verifying a job applicant’s educational credentials is an important part of any background check. Usually that confirmation consists of a letter or phone call to the educational institution requesting the applicant’s dates of attendance and any degrees or certificates awarded. That isn’t enough in the current diploma market!

The economic climate and lack of enough qualified applicants for certain occupations has resulted in a rash of diploma mills in this country and abroad. In addition, the popularity of distance learning programs has made it easier to provide phony educational credentials. In the last year, the number of such institutions was up 48%, according to an article on the Society for Human Resource Management website. Many of these institutions offer educational degrees and certificates to foreign workers eager to enter the US market. As of this month, the report states that 1008 such institutions have been identified in the United States.

In addition to the fake documents, the employer may also have difficulty in verifying that an educational diploma abroad is equivalent to one issued in the US. Hiring employees who don’t have legitimate credentials, or who don’t have equivalent training from abroad, exposes employers to significant risk. There should be as much of an emphasis on checking educational backgrounds as in checking any other factors in the process.

Many HR professionals are unaware of the magnitude of the $1 billion international diploma mill industry, and are not validating the issuing institution. Suggestions by one background check service suggestion that U.S. schools can be validated through the U.S. Department of Education or the Council on Higher Education Accreditation. Verifying the legitimacy of foreign institutions requires more effort, but any professional background check should be able to provide information. (wikipedia has a fairly thorough list, though they caution that it is by no means the last word).

Talent Poaching An Issue

Ingrid Baker — Wed, 20 Apr 2011 14:17:57 +0000

Recruiting firms and companies themselves are noticing that talent poaching, especially in the technology industry, is becoming a big issue this year and will be in the future. Talent poaching means one company snags a competitor’s talent with the lure of hirer salaries or other perks. Bloomberg Businessweek reported recently that poaching in tech companies is an epidemic. Firms use email or LinkedIn to contact passive candidates. Bottom line is this can affect YOUR company’s future plans significantly.

First let’s look at why. The economy is reportedly recovering, and sections of the technology industry are part of that recovery. Computer hardware and software, as well as renewable energy businesses are planning for growth. Meanwhile, the pool of qualified talent in science, engineering and math skills is not going to be able to meet our predicted demands. Companies also need experienced leadership to take them to the next level. Logically hiring managers will look at the existing workforce to try to fill those gaps.

An even bigger issue is that most organizations aren’t prepared to address this threat. How can you prevent your top talent from leaving for what they perceive as greener pastures? The first step is to take a good look at which of your employees might be a target for poaching. Then look at what your company can do to avert the threat.

In the current economic climate, giving folks a raise isn’t always an option, but money isn’t always the answer. As long as the compensation is competitive in the industry, there are other things that might encourage loyalty to the current employer.
It sounds like a broken record, but flexible work hours is one of the things employees really appreciate. One candidate I know is wanting to make a change, but the thought of losing 4 weeks vacation a year and flexible work hours holds him back.

Another possibility is to assign your star performers to exciting and stimulating projects. A challenging, interesting assignment can be as satisfying as a raise for some.

There is always to option of asking employees to sign noncompete agreements or other legally binding contracts, but that’s not always a morale builder, and has to be carefully crafted. High tech companies with a lot of research going on may be an instance where this is important.

In the end, your successful and talented staff are an asset to protect as you plan for your own growth and success. Include them in any strategic planning as you go!

Unemployment Insurance Taxes Going Up!

Ingrid Baker — Wed, 23 Mar 2011 18:48:05 +0000

An article in the Society for Human Resource Management Legal Issues section gives a bleak picture of UI costs across the country. Speaker Douglas Holmes, President of UWC spoke before a session of the SHRM employment law conference last week. He provided some interesting facts.
State unemployment taxes increased as a percent of wages about 34% from 2009 to 2010, and are expected to go up even more in the next year. Also, thirty-two states have outstanding federal loans (from the FUTA fund) to the tune of $43.6 billion. Interest on those loans is approximately 4% for 2011. Interest amounts cannot be paid from state UI taxes, according to federal law, so states will have to have special assessments or increase the FUTA rates to meet these costs. Spending on unemployment is at an all time high, as we have seen in the news.
How can companies affect their UI costs? Management, both in their policies and in their employee hiring, reviewing and firing, can have a major effect. The SHRM article had some ideas on what Human Resources can do to help mitigate these costs. Some are pretty obvious: review and verify tax rate notices, make sure that your employee and contractor classifications are correct, and make sure that you have accurately reported wages.
Also, HR should work to protect the company’s experience rating. Filing claims accurately and timely is important. Spending time appealing incorrect determinations will help the company down the line, and make sure a company HR representative attends these hearings.
Finally, review and improve hiring procedures and performance management appraisals. Careful and accurate documentation in these processes can reduce UI claims. Any employment actions or disciplinary procedures should be reviewed for accuracy and thoroughness.
Training for managers and supervisors on a regular basis is important. Working with state unemployment agencies to help identify training or internships for unemployed workers can help serve some of your needs while reducing unemployment claims. Most of all, stay on top of this issue! It is only going to get more costly in the near future.

Hiring Predictions Looking Up

Ingrid Baker — Fri, 11 Mar 2011 21:43:20 +0000

According to the National Association of Colleges and Employers (NACE), the Class of 2011, whose prospects were already better than those of the Class of 2010, will experience an even more positive hiring environment. Polls conducted with NACE member employers indicate a positive hiring index for January of 2011, with the February index showing an even higher response.
The scale used to scores responses ranges from 0-200, with 100 meaning no change. The January survey index was 120.9. In February the index jumped to 126.3. In addition, the percentage of employers that reported plans to hire more graduates has grown – to 53.3% based on a 39% response rate for the employer group.
On another note, a Society for Human Resource Management (SHRM) survey of employers in January of this year indicates that starting salaries may be slightly higher than last year. Their Leading Indicators of National Employment index also indicated that both manufacturing and service businesses expect to add employees. They also indicate that they expect recruiting to be more difficult than last year.
Finally, at the other end of the scale, it seems that some industries such as health care are concerned about replacing C-level people as the baby boomers start to retire. An AMA survey of 117 senior health care executives revealed that fewer than 7% of health care organizations are prepared to deal with a sudden loss of key leaders. Considering the huge changes coming down the pike for this industry, and considering also the predicted shortage of health care providers, the impact on business and individuals of this shortage could be major!
More surveys: global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc., June 9, 2010 found that turnover among top executives in the United States jumped 23.7 percent in May 2010, as 125 CEOs announced their departures,. Challenger found that in this group also, succession planning was lacking.
So – this could be a big opportunity for those middle management folks that were squeezed out in the last layoff to get their tools sharpened for the future! Someone has to fill these positions. Why not you?

Contractor Rules – Do You Qualify?

Ingrid Baker — Thu, 17 Feb 2011 21:26:34 +0000

First let me state that I’m not a lawyer, just a law-abiding citizen. I do pay attention when folks mention problems in the HR world and it seems complying with IRS rules for contractors is very important, and receives a lot of attention. So I’ve hunted around to get input from various groups on what to watch out for. Here goes.
First, the guiding principles of a contractor vs. employee:
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
From another source, findlaw.com, I find a 20- factor checklist to determine whether you are an independent contractor. Lawyers can always give more detail. I’ve highlighted most of the list. Here is the quicksummary of when you’re NOT independent.
1. You receive specific instructions on how to do the work from the employer.
2. Training to perform the task in a specific manner, by an experienced employee.
3. Integration of the “contractor’s” services into the business operations.
4. Services must be rendered personally.
5. If the hiring supervisor is responsible for hiring and paying assistants but not contractors, the inference might be made that it’s an employment situation.
6. Continuing relationship – contracts should have a clear ending
7. Set hours of work.
8. Full time required.
9. Doing work on employer’s premises required.
10. Order or sequence of how to do task is set.
11. Regular oral or written reports – implies control.
12. Payment by hour, week or month rather than by task performed or contract term.
13. Payment of business or travel expenses.
14. Furnishing tools or materials
15. If worker has significant investment in the workspace not reimbursed by employer it indicates independence.
16. Working for only one entity implies control and thus employment.
Isn’t life interesting?